A SD-Based Reflective Strategy Development Process

Present firm growth literatures, with notable few exceptions, tend to be static explanations and qualitative suggestions, failing to validate whether the causal ambiguity hidden inside specific growth patterns is completely and correctly explained. Without objective knowledge and information of causal ambiguity, the enhancement of firm strategy formulation process can be rather difficult. In consideration of complex feedbacks and time delay misperceptions that often cause ineffective or counterproductive actions that worsen complex dynamic growth problem, this paper proposes a simulation-based framework to facilitate managers to organize and construct growth logic in pursuit of firm growth. Based on the concept of reflection-in-action that is essential for common practitioner’s learning, the proposed framework designs an iterative organizational inquiry and reflection process with the support of an evolving simulation model. The evolving simulation model that starts from what a firm expects and ends with complete firm growth logic employs the system dynamics approach in expressing complex interactions among factors that are relevant to the expected growth. Following the Action Science paradigm, in this paper, a longitudinal research at a participating firm, MeiK Co., is conducted to observe the firm’s strategy development and refinement process with the proposed simulation-based growth logic construction framework. How the case under discussion enhanced its understanding of the confronted growth problem and reformulated its growth logic to guide the formulation of relevant growth strategies are clearly illustrated and discussed.